Joint-Presentation by Chairpersons of Portfolio Committee on Higher - - PowerPoint PPT Presentation
PRESENTATION TO THE COMMISSION OF INQUIRY INTO HIGHER EDUCATION AND TRAINING by Parliament of RSA Joint-Presentation by Chairpersons of Portfolio Committee on Higher Education, Standing Committee on Appropriations, and Standing Committee on
1. Introduction and background 2. The System of Committees 3. The mandate/role of Parliament in the budgetary process 4. The role of Committees in the Budgetary Process and discussions and recommendations on funding post school no fee increases and free higher education
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provide testimony and evidence on the following: – The role of the Committees in the budgetary process; – The Budgetary Review and Recommendation Reports in respect of the DHET for the past four years; – Discussions and recommendations on the funding of post school higher education and training since 2015 – Discussions and recommendations on the funding of fee free higher education and training; – Discussions and recommendation on the funding(and) the decision taken in October 2015 that public universities would not increase student fees for tuition and accommodation for the 2016 academic year; and – The considerations which affect budgetary allocation to the post school education and training sector.
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committees.
establish a plethora of committees.
– The Rules Committees – The Standing Committees on Finance and Appropriations – Portfolio Committees in the National Assembly (one for each State department); and – Select Committees in the National Council of Provinces (clustered by sector)
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Money Bills Amendment Procedure and Related Matters Act, Act 09 of 2009.
established at the start of each Parliament.
69 of the Constitution grants committee’s considerable powers. – may summon any person to appear before them to give evidence
– require any person or institution to report (and may) receive petitions, representations or submissions – conduct public hearings, determine their own procedure and confer with other committees
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– established in terms of section 55(2) of the Constitution; – required by Section 5(2) of the Money Bills Act to annually prepare a budgetary review recommendations report (BRRR)
the Department after assessing its service delivery performance given the available resources. – facilitates the passing of legislation on Higher Education and Training; – scrutinises and oversees executive action (Department of Higher Education and Training and its entities; – facilitates public participation and involvement in the legislative and
– Cooperative governance – International relations
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– oversees and monitors Department with more than 100 entities
Adult Learning Centres,
African Qualifications Authority and Quality Council for Trades and Occupations),
Institutions.
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Training Sector: – The inadequate allocation of upfront payment to FET colleges and universities during the beginning of the academic year. – The demand for financial assistance exceeded the available funds within NSFAS. For 2012/13, R1.2 billion was required to cater for DHET Final Year Programme students and only R783 million from fiscus was allocated. NSFAS used funds from loan recoveries to cover the shortfall. – Funding needs of students at the proposed two new universities (University of Mpumalanga and Sol Plaatje University) were going to stretch the limited resources the Scheme had.
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and Training Sector: – The Minister of Higher Education and Training should submit a bid to the National Treasury for additional funding required for the following;
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2012/13 Recommendations continued
Medunsa,
Adults,
NAMB and,
records to speed up verification process and prevent use of fraudulent qualifications.
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– NSFAS was owed more than R2 billion and loan recovery systems slow and ineffective. NSFAS had serious budget shortfall. More emphasis to be placed on recovering debt by former students to supplement budget shortfall. – Despite increase in funding from R440 million in 1999 to R9 billion in 2014, demand for aid exceeded supply. 50% of eligible students were unfunded by NSFAS owing to inadequate budget. – The increase in student protests across higher education institutions, even where the new model was piloted, highlighted as a major threat to stability in higher education. New model did not make provision for ‘top- slicing’. This infuriated needy students not funded for 2014 in institutions where new model was piloted.
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– Additional funding for Department to cover its operations, funding requirements for NSFAS, shortfall in TVET Examination Services, implementation of the National Senior Certificate for Adults (NASCA), and the TVET college infrastructure – The Minister of Finance should increase funding to meet the 2030 NDP targets for expansion of TVET and Community College system, especially in regard to NSFAS, subsidies, college infrastructure and equipment; – The Minister of Finance should significantly increase allocation for university infrastructure, especially for student residences;
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– The Minister should realistically increase the budget of the National Student Financial Aid Scheme over the medium term to enable all academically capable, but financially needy students to access higher education and technical vocational education and training and to cover full cost of study through loans bursaries as proposed in the NDP; and to accommodate incremental growth in student enrolment through the new universities and the envisaged 12 new TVET college campuses; and – The Minister should consider making available bridging funds to NSFAS for allocations for tuition fees and other living expenses for students at the beginning of the academic year, owing to the misalignment of the academic year and financial year.
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– NSFAS should improve the loan recovery strategy in order to reduce the value of the loan book and to improve the monthly repayments by debtors, as well as to explore a fund-raising strategy targeting private sector involvement in student funding to reduce the current budget shortfall of the entity.
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– The poor loan recovery strategy was a disincentive to possible private funders / donors for the scheme during the period under review.
– Adequate funding for higher education and training will enable the Department to achieve on its: curriculum review for Report 190/1 programme; establishment of the South African Institute for Vocational and Continuing Education and Training (SAIVCET), increase subsidies to universities, expansion of the Higher Education AIDS programme to TVET Colleges, expanded access to TVET Colleges, implementation of the Department’s new organisational structure and strengthening of the monitoring and evaluation unit;
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– Allocation of infrastructure grants to TVET Colleges will enable colleges to; maintain, expand and develop their infrastructure to alleviate the acute shortage of student housing in colleges; and – Partnership between private sector, business and the Department is
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– The Department was in contact with the historically disadvantaged institutions (HDIs) that were experiencing financial constraints, after implementation of zero fee increment. This intervention was aimed at bringing stability in the institutions to mitigate eventualities that might negatively impact the academic programme – The increase in university subsidies over the 2016 MTEF period was R16.2 billion, and this was insufficient to meet the growing demand for higher education. – The Department expressed concerns that the investment made in higher education was insufficient for the student numbers enrolled and the projected NDP targets may not be reached unless there was a huge injection of funds for the sector.
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– The TVET sector was underfunded and had R3 billion shortfall based
its expansion as envisaged in the White paper on Post-School Education and Training (WPSET). – The TVET colleges do not have dedicated infrastructure grants. However, the review of the funding norms for this sector was underway, which was also expected to cater for infrastructure development
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for tuition and residence fees for 2016, which was contributed by both the universities and the Department through reprioritisation,
and for funding continuing unfunded NSFAS beneficiaries,
feasibility of providing fee-free higher education in South Africa,
Training objectives.
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– The Department’s budget for 2016/17 excluding direct charges was R49.2 billion, which was an increase of R7.3 billion from the previous financial year. The Department and some of its entities continued to be underfunded. The current funding of the Department does not match its expanded mandate of producing a “skilled and capable workforce to support an inclusive growth path”. – The Department
more than 100 entities. With the R382.975 million (0.8%) budget remaining for operations after transfers and compensation costs, the Department would not be able to effectively and efficiently support and monitor this ever growing sector.
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– The Financial and Fiscal Commission (FFC) has noted that the share
declining, while the number of poor students accessing higher education and training as well as the costs of running the universities have increased. The FFC recommended that there is a need to adequately fund TVET and CET sectors, which have been historically
colleges for 2016/17 was R6.6 billion, which was insufficient for the student numbers enrolled. There was over R4 billion programme budget shortfall expected in 2016, and this amount increased year on year and projected at R12.5 billion in 2019.
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percent fee increment in 2017 academic year going forward. The Department alluded that its current funding would not allow for further reprioritisation to fund a zero percent fee increase. This matter was to be attended to urgently so that universities can be informed in time to make accurate budget decisions for 2017.
consumer price index (CPI). The Department targeted to cover at least 80 percent of college students with NSFAS bursaries, however, the investment of R2.4 billion for 2016/17 was insufficient, taking into account the NDP and White Paper targets.
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– The 2016 bursary shortfall was estimated at R2.3 billion, which was projected to grow to R5.6 billion if the current level of funding is maintained. – The three Quality Councils; SAQA, CHE and QCTO received budget cuts.
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– established in terms of the Money Bills Act (section 4(3) – powers and functions include considering and reporting on the following matters:
Bill, Supplementary Appropriation Bill and the Adjusted Appropriation Bill;
including those referred to in the Intergovernmental Fiscal Relations Act, 1997 (Act No. 97 of 1997);
(section 32 reports); and
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– With regards to value for money in higher education, the Committee highlighted that the investment made by government in higher education and training has increased significantly over the past few years though the increase in expenditure has not been proportionate to the increase in the skills level of the country’s workforce, especially within the previously disadvantaged communities.
– That National Treasury in partnership with the Department of Higher Education and Training develop and implement strategies to link funded municipal capacity building programmes with Further Education and Training (FET) programmes and position municipalities as employers of choice for FET graduates.
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– The funding allocations for post-school education and training will rise rapidly in the medium term from R59.5 billion in 2014/15 to R68.1 billion in 2017/18. Out of the allocations for the post school, 55 per cent consists of subsidies to universities and contributions to the National Students Financial Aid Scheme.
– National Treasury in partnership with the Department of Higher Education and Training consider the mechanisms on leveraging funding streams within the Sector Education and Training Authorities and the National Skills Fund towards student funding in higher education, especially increased funding for the National Student Financial Aid Scheme.
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– In recognising the 2015 Fees Must Fall student protest, SCOA convened a special joint briefing with the Select Committee on Appropriation and the Portfolio Committee on Higher Education and Training, – SCOA invited and received briefings from the Department of Higher Education and Training, National Treasury, the Council on Higher Education (CHE) as well as the Financial and Fiscal Commission (FFC) – The focal point was on finding solutions for adequate funding and zero fee increment in Higher Education and Training.
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– The Committee received National Treasury’s submissions that it was not necessary to amend the 2015 Adjustments Appropriation Bill as resources can be mobilised to fund the shortfall as a result of the no fee increment in universities in 2016. – The Committee welcomed initiatives to fund the no fee increment but was seriously concerned at the impact it would have on that this will have on programmes for the Historically Disadvantaged institutions and earmarked support for TVETs and universities. The Committee urged all stakeholders should ensure these institutions are adequately assisted. – The Committee received Department of Higher Education submission that that the zero fee increment shortfall of R2.330 billion for 2016 will be shared between universities and the Department.
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– That National Treasury together the Department of Higher Education and Training and relevant stakeholders including the leveraging of expertise to support higher education institutions most affected by the reprioritisation exercise especially the historically disadvantaged institutions. – That the Department of Higher Education and Training and National Treasury ensure funding is mobilised in the 2016 MTEF for all affected programmes in Historically Disadvantaged Institutions and TVETs as result of reprioritisation and that these programmes continue as planned. – The Department of Higher Education and Training ensure that there is continued support for TVET and CET and that vocational skills programme links with the private sector are continually strengthened.
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– The Committee welcomed the range of options for long term funding provided by the various stakeholders which include significantly reprioritising state funding, committed implementation of plans to sell nonstrategic assets, increasing the tax burden, ensuring those who afford to pay more or borrowing. – The Committee agreed with recommendations
the Portfolio Committee on Higher Education on that adequate funding for higher education and training will enable the Department to achieve on its
Colleges will enable colleges to maintain, expand and develop their infrastructure to alleviate the acute shortage of student housing in colleges; and the need for partnerships between private sector, business and the Department of Higher Education and Training.
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funds for higher education through state funding;
the macro-economic growth objectives of the state;
including re-examining the efficacy of SETAs, UIF and others and their budget balances;
benchmark South African higher education funding with comparable countries;
drive with key stakeholders in the financial sector to implement innovative ways for funding higher education students;
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This is both wasteful and unsustainable, hence SCOA called for all stakeholders to undertake a concerted campaign to address these inefficiencies.
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stakeholders on the need for attention to be given to NSFAS loan and debt recovery rates, that universities should self-examine operational effectiveness and implement cost containment measures, that SETA funds be re-examined and that universities to share infrastructure, services and resources where practical and overall improvements in internal efficiencies.
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allocations to the Department?
2013 MTBPS, SCOA recommended that the National Treasury develops and implement mechanisms to ensure that baseline funding requirements are in place for the successful transfer of the FET colleges function to the Department.
Department was mainly done through desktop exercises and submitted reports due to a limited operational budget.
views rigorous monitoring and evaluation
the Department’s entities and funded institutions as critical for the effective and efficient use of resources towards the improvement of student success.
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allocations to the Department? – SCOA supported the submission by the Department that more funding within the Budget Vote be reprioritised towards its operations as this would allow for more resources to be employed towards the monitoring and evaluation of transferred funds. – The SCOA further noted the Department’s indication that a forensic investigation relating to NSFAS administration and operations will be undertaken.
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allocations to the Department? – In responding to this, SCOA recommended that In responding to this, SCOA recommended that National Treasury as part of the 2015 Adjustment Appropriations Bill consider ways
the
allocated funds within the 2015 budget framework allocations in
to significantly improve their monitoring and evaluation capacity. National Treasury as part
the 2015 Adjustment Appropriations Bill consider ways
increasing the
budgets of the Department through reprioritisation of allocated funds within the 2015 budget framework allocations in order to significantly improve their monitoring and evaluation capacity.
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approximately 1 million university students, 720 000 TVET college students and 330 000 CET college students. The Committee further notes that the NDP states that all qualifying NSFAS students should receive Full Cost of Study loans and that students who do not qualify should have access to bank loans, backed by State sureties.
enhanced and strong oversight by Parliament together with all partners in society for the adoption of budgets that eliminate wasteful expenditure and that government implements more cost-effective service-delivery models that will make more resources available for sustainable, adequate and equitable funding for higher education.
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The Standing Committee on Finance (SCOF) – established in terms section 4(1) of the Money Bills Act – mandated, in terms of section 4(2) of the Act, to consider and report on (a) The national macroeconomic and fiscal policy; (b) Amendments to the fiscal framework, revised fiscal framework and revenue proposals and Bills; (c) Actual revenue published by the National Treasury; and (d) Any other related matter set out in this Act.
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The Standing Committee on Finance (SCOF) – holds joint public hearings with the Select Committee on Finance as provided for in section 8 (2) of the Act. As a result, the
refer to ‘Committees’ rather than ‘Committee’.
framework reports by SCOF, the Committee noted several observations and recommendations specific to Higher Education and Training. Given that all the issues raised were within the Appropriations Committees’ mandate, SCOF referred matters to the Appropriations Committees. Below are specific observations and recommendations that were made.
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Recommendations – “The Committees support the students demand for no fee increases during 2016. The Committees also believe that there should be free tertiary education for those in need, and government, through engagement with the key stakeholders, needs to explore the possibilities of this. This should include defining who qualifies as needy.” – “The Committees believe that tertiary education should be more directed to producing the skills the economy needs, partly to ensure that graduates are more likely to be employed and contribute to the country’s developmental goals.” – “The Standing and Select Committees on Finance have to work closely with the Standing and Select Committees on Appropriations in addressing issues on the financing of tertiary education…
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…From parliament’s side, it will be the Appropriations Committees that will have to address many
funding of tertiary free education for the needy. While recognising the complexities, the Finance Committees recommend that the Presidential Task Team dealing with the funding for “no-fee increases” finalises its work as soon as possible. Universities should, within their means, contribute to this funding as far as possible, but government will have to find the remainder of the funds from within the national fiscus. The Appropriations Committees will, after engaging with the Higher Education and Training Portfolio and Select Committees, have the primary say from parliament’s side on this, but for now the Finance Committees suggest that government looks into the possibility of the budget of DHET being reprioritised to find some of the funding for “no-fee increases”. Consideration needs to also be given to allocating unused funds from the National Skills Fund and the SETAS, while ensuring that skills training needs are not unduly
all the relevant stakeholders, consider providing free tertiary education to the needy reasonably
Finance Committees need to work with the Appropriations Committees to mandate the PBO to begin work on developing parliament’s position on this as soon as the Appropriations Committees have processed their work on the current MTBPS. The government needs to ensure that it is far more effective in getting NSFAS loans repaid by beneficiaries who can afford to pay back and must deal with inefficiencies in its loan repayment system.”
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– “The Committees welcome the increases in the tertiary education budget but would like to see better outcomes.”
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BRRR for National Treasury dated 25 October 2016: Recommendation – “The Committee recommends that NT works more actively with the Department of Higher Education and Training and other relevant departments to find a sustainable solution to higher education fees
Appropriations and Higher Education and Training and the Parliamentary Budget Office on this issue.”
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– “The Committees welcome the fact that the Budget has continued to protect the provision of social services and has provided further resources for the higher education sector to ensure that there are no fee increases for needy students.”
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